Q&A: Bob McCulloch, chief executive, Virtue Fusion Alderney

EGR: We all know Playtech has been on the acquisition trail, but how did the takeover of Virtue Fusion come about?

BM: The existing Playtech bingo product was not yet fully optimised and needed work to become competitive, while the size and liquidity of the Virtue Fusion Alderney (VFA) network is now pretty much unrivalled. This made us an attractive proposition, hence the approach. We also felt Playtech’s greater international reach and regulatory expertise would benefit our operation.

EGR: How receptive was Virtue Fusion to the approach ““ was a takeover on the cards anyway?

BM: Before this round of negotiations, Playtech and VFA had conducted a number of discussions over the past two years. In the intervening time, our customer base and revenues had grown to such a point that it appealed to Playtech, further setting the stage for a deal to go through. For the record, VFA did not orchestrate a sale process. We were approached by a number of companies, many of which were not appropriate suitors due to their involvement in bingo operations. VFA has strong customer relations which would have been damaged if we had been bought by a company that was competitive with some of our clients. Our perfect partner was therefore a pure B2B company, and Playtech fitted the bill.

EGR: When a 200-person company is taken over by a 1,000-person organisation there is bound to be a bit of a culture clash. What are the main differences between the companies?

BM: The respective sizes of the companies has given rise to diff erences, but we have been more surprised by the similarities in the way the two groups approach all aspects of the business ““ for example, having clear reporting lines and similarly defined teams. Any differences owe perhaps more to the locations in which we are based. Playtech is an Estonia-based technology business, run and managed by a very bright group of people globally. VFA is British through and through.

EGR: Tell us how the Virtue Fusion strategy has evolved or is likely to evolve?

BM: We are looking to provide bingo to global operators in multiple regulated jurisdictions, which will involve a heightened awareness of international regulatory issues as well as cultural and local gaming preferences, as each country has its own flavour of bingo. Our business will also need to develop to meet the needs of international gaming operators in the increasingly complex but growing market for online bingo. The knowledge and experience Playtech can impart here will help us achieve this.

EGR: What is your view of consolidation plays generally?

BM: Consolidation will have a big say in the way the online gaming market evolves. Operators derive efficiencies through greater size and the capability to cross-sell gaming platforms to customers. Some of the much-talked-about plays, as and when they come about, will make it harder for small operators to compete. In the B2B space, the main players, including Playtech, are looking at land-based gaming as well as delivering into new regulated markets in the online space. In this environment, providing a properly integrated, multi-platform approach to gaming software will be possible only with scale and reach. More consolidation is definitely on the way.